The value of foreign investment in the U.S. hit $26.54 trillion the fourth quarter, up $777.8 billion from the previous quarter and far surpassing a $372.1 billion increase in U.S. investments abroad, the Commerce Department’s Bureau of Economic Analysis said. Adjusting for inflation, the value of foreign investment surpassed the previous record in 2011 and is at the highest level since the data were first collected in 1976.

Reuters

The quarterly report showed foreign investors and companies playing an expanding role in U.S. markets. The development has worried some economists, because it makes the U.S. more vulnerable to major shifts in the global economy. But it also could show strengthening confidence in the American economy.

The BEA said most of the quarterly increases were based on rising asset prices, rather than investors plowing more cash into markets. In that period, the Dow Jones Industrial Average rose by around 8% to new highs, buoyed by growing optimism about the U.S. economic outlook.

U.S. investments overseas were tempered by lingering concerns about Europe’s economic recovery and worries over tapering growth in large emerging markets.

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